02 September 2005


You've just bought the latest novel by Barbara Cartland.1 After throwing it against the wall—gently, to avoid reducing its resale value—you decide to try to get a little cash out of it. You therefore stroll on down to a shabby used book store pre-owned literary product showroom, intending to sell it for a few bucks and get a latté with the proceeds, rightly figuring that you'll get more satisfaction and less indigestion from the beverage. As you finally get to the acquisitions counter, though, and slap the $27.95 monstrosity2 on the counter, the elderly gentleman standing there shakes his head.

"I can't buy that one."

"It's been out three days and you're already overstocked?" you reply.

"No. It has a no-resale license agreement, and you agreed to it by buying the book."

"What about the first-sale doctrine? Doesn't that allow me to sell it again?"

The elderly gentleman, who looks suspiciously like Professor Kingsfield, just smiles. "On the back of the book, it clearly states that the book is subject to a license agreement." He points to some difficult-to-read cursive 8-point type at the bottom of the dust jacket. "You were therefore on notice that the book was subject to an end-user licence agreement. If you'll turn to the verso of the title page, you'll find the EULA"—you frantically flip the book back over and look at the page, which in most works of fiction contains only a copyright notice and a copy of the Library of Congress cataloging data, and see that there is quite a bit more 6-point type than usual—"which clearly prohibits resale of the book within the first year after publication. You therefore agreed to the EULA, and you're stuck with it—especially since the deluxe $39.95 edition does not have this term in its EULA, so you had a choice." As he finishes the sentence, his voice raises up into an uncanny imitation of John Houseman in his later years, when he was hawking financial services.

You think this is impossible? I wish I did, but I don't. Professor Madison has an interesting sketch of two just-issued appellate opinions that make this far less of a hypothetical than I would prefer.3 The Eighth and Ninth Circuits held earlier this week that certain aspects of "shrink-wrap" and "click-wrap" licenses that void rights conferred by statute are enforceable. Given the enthusiasm in the publishing industry for closing down the used-book market on new books, I'm afraid it's only a matter of time before something like this happens.

  1. Of course I know she's long dead. Unfortunately for the sake of literature, she left a hundred-odd unpublished manuscripts behind at her death, and they're making their way into the marketplace—rather like killer bees heading north from Central America. Besides, since she's now dead, I can make all the snide remarks I want to concerning her inability to plot, develop character, or write.
  2. Yes, I know you're a smart shopper, and probably didn't pay list. As you'll see shortly, that doesn't matter.
  3. I might as well admit it now: I had a central role in making this possible, as I did the briefing in Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997). I won the case below, and lost on appeal—no thanks to certain other factors (not in our control) that made the brief and oral argument less persuasive than they could or should have been. I suppose that I should really blame this on Judge Easterbrook; his decision in Hill relies extensively upon his earlier (and equally flawed) decision in ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996), which was not handled by my firm. Even some of Judge Easterbrook's colleagues on the Seventh Circuit disagree. But the sense of guilt remains.